From old Nazis to enhanced breasts, 16 weird things you didn’t know were taxed in Canada

In 1650, in the budding French colony that would one day become Canada, colonial authorities levied a 50% export duty on beaver pelts and a 10% duty on moose pelts. According to Mark Milke, author of the 2013 book Tax Me, I’m Canadian! this was Canada’s “first known instance of taxation.”

And it was only the beginning. The interim 360 years have seen import taxes, alcohol and tobacco duties, property taxes, excise taxes and—following the 1917 imposition of income tax—the basic assumption that every good or service without an exemption is basically taxed.

To mark Tax Day, the National Post has dredged the darkest depths of Canada’s byzantine tax law to unearth this list of the most unique tariffs, duties, royalties and levies charged by this great Dominion.

Nazi pensionersIt is common knowledge that the Canadian Revenue Agency does not tax benefits paid to Canadian Forces veterans, but less well-known is that pension deductions are also extended to Canada’s former brothers in arms. Under Section 81 of the Income Tax Act, foreign “disability or death” war benefits are only exempt if they are paid out by a country that was “an ally of Canada at the time of the war.” Consequently, this means that, Long after the guns have gone silent, naturalized Canadian citizens who once served in the Wehrmacht, Luftwaffe or Kriegsmarine must pay taxes on any pensions they may be receiving from the Federal Republic of Germany. There is one German war benefit, however, that Canadian tax authorities are prepared to overlook: Pensions paid by the Federal Republic of Germany to a “victim of National Socialist persecution.”

Compact discs
Whenever a consumer buys a blank CD, the federal government maintains an implicit assumption that the CD will be used dishonestly to steal copyrighted content. Consequently, we have the Private Copying Tariff, a 29-cent surcharge that is charged on each and every CD sold in a Canadian retail store. Overseen by the federally run Copyright Board of Canada, the collected levy goes to the Canadian Private Copying Collective (CPCC), a Toronto-based non-profit that tasked with kicking the cash back to the music industry. The collective, it should be noted, objects to the tariff being called a tax, preferring to see it as “a royalty paid to music rights holders.” Either way, the sums are nothing to sniff at. Between 2000 and 2009, the tariff collected $285-million, about $8 for every Canadian citizen.

Enhanced breasts
Canadians are living in a golden age of rhinoplasty, botox injection, breast augmentation, vaginoplasty and even teeth whitening. And fortunately for government coffers, ever since 2010 any of these “surgical and non-surgical procedures purely aimed at enhancing one’s appearance” are completely taxable and can no longer be claimed as a medical expense. There are still exceptions, of course. Canadian can still write off a cosmetic procedure if it is performed to patch up the results of a “congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.”

Celibate ducks and geese
Pieces of animals – such as rendered fat and hair – are frequently subject to some kind of import tariff, but unprocessed, breathing animals can usually get into Canada tax-free. This not only applies to standard livestock such as sheep and horses, but exotic creatures like apes, parrots and even killer whales. The tariffs get weird, though, when it comes to geese, ducks and turkeys. If the fowl are brought in for “breeding purposes,” they come into Canada tax-free. Geese, ducks and turkeys imported for “other” purposes, meanwhile, are subject to an 8% tariff. If Canadians want to ride/breed/shear/love their imported animal, they can usually bring it in for free. But if they’re probably just going to eat it, the government wants a cut.

Sensible shoesAs a general rule, women’s shoes entering Canada are hit with an 18% tariff. But according to heading 6403 of Canada’s mammoth 1,500-page Customs Tariff, expensive shoes are taxed at only 11%. Granted, the government’s definition of expensive is “$30 or more,” but before retail and shipping surcharges, the vast majority of shoes sold in Canada are indeed less than $30 when they enter the country. As Karl Littler, a vice president at the Retail Council of Canada, explained, in Canada “most shopping mall-type shoes get hit with a higher tax than a pair of Manolos.”

Driving while cool
While regular air conditioners are taxed in Canada the same as any other household appliance, section 7 of section i of the Excise Tax Act holds that any air conditioner in an automobile, station wagon, van or truck is subject to a $100 extra fee. Although almost everyone has paid the tax, the majority of consumers are unaware of the tax as it is usually just bundled up in the sticker price of new cars. As always, some exceptions apply. Drivers of hearses, ambulances and mobile homes can obtain mobile air conditioning tax-free. For more intrepid tax-dodgers, the Canada Revenue Agency will also overlook any automotive air conditioner powered by something other than the car’s engine

Non-fresh seafoodThe Canadian tariff schedule can be notably lenient on imported seafood. Canadian grocers are free to ship in all manner of lobster, salmon, eel, swordfish and shrimp without paying a cent at the border. But the no-tax party ends if the seafood has spent time in a smokehouse. According to the Canadian Border Service Agency, imports of fresh snails, fresh lobsters and fresh mussels are all tariff free, but smoked versions of these foods automatically incur a 4% tariff. Canada also charges extra for lobsters and shrimp that have been ground up into “flours, meals and pellets,” and a 3% surcharge on un-shucked oysters.

Green fuel
For six years, British Columbia has stood as the only major Canadian jurisdiction to maintain a carbon tax. According to the B.C. Ministry of Finance, the whole purpose of the tax is to encourage citizens to “use less fossil fuel.” Arguably, one of the easiest ways for drivers to eschew fossil fuels would be to buy a diesel car and fill up its tank with biodiesel, a renewable, sulphur-free diesel substitute made entirely from used restaurant grease, crushed soybeans or rendered animal parts. And yet, since 2010, biodiesel has been slapped with the exact same carbon tax as regular diesel. At the time, Alex Day, founder of the Vancouver Biodiesel Co-op, called the new levy “mostly just a slap in the face.”

Organic food
So many Canadians apparently try to claim their Whole Foods grocery bill as a tax-exempt medical expense that the Canada Revenue Agency has felt the need to specifically list “organic food” as an ineligible deduction. Also ineligible: Gym memberships, vitamins and running club memberships. When it comes to health, the tax authority is fine with Canadians writing off their wheelchair, seeing eye dog or pacemaker, but six-pack abs and good Chi are going to cost extra.

Scientology
It’s been 21 years since the U.S. Internal Revenue Service controversially afforded tax-exempt status to the Church of Scientology, the spiritual organization founded in the early 1950s by science fiction writer L. Rob Hubbard. No such exemption exists in Canada, where Scientology does not even have charitable status. As a result, any “stress test,” E-meter audit or film screening carried out at one of Scientology’s 14 Canadian churches and missions is taxed just the same as a private business.

Bitcoins
On the eve of Tax Day 2013, the Canada Revenue Agency politely reminded Canadians that bitcoins, the digital cryptocurrency anointed as the futuristic successor to government fiat money, remained fair game for Canada’s tax collectors. “Barter transaction rules apply where bitcoins are used to purchase goods or services,” tax authority spokesman Philippe Brideau told the National Post at the time. But that was back in the innocent days of April 2013, when a single bitcoin was selling for a piddly $140. In the year since, the volatile currency has reached heights of more than a $1,000 and made instant millionaires of unsuspecting bitcoin early adopters. Meanwhile, untold numbers of the coins have been lost, stolen or embezzled. All of this, coupled with the inherent anonymity of bitcoin transactions, will inevitably give the CRA a bit of a headache in conducting bitcoin audits.

Giant cars (that aren’t pickup trucks)
For those who believe that the Canadian tax code is merely a cynical scheme to suck as much revenue as possible from the citizenry, consider the following enigma: Canada imposes high taxes on gasoline, but Canada also imposes taxes on cars that use too much gasoline. The result is the “green levy,” an excise tax on “fuel-inefficient automobiles.” The tax can swing as high as $4,000 for vehicles with fuel economies lower than 18 miles to the gallon, but the measure comes with one massive, mag-rimmed, truck-nutted exemption: Pickup trucks. Any vehicular behemoth, no matter its mammoth size or gas-guzzling capabilities, is completely ignored by the Excise Tax Act as long as it technically has the ability to haul a few 2x4s.

Affordable cheese
If the curious existence of a thriving black market for pasteurized cheese was not clue enough, Canada is quite protective of how its citizens buy and consume cheese. This is done both by deliberately tamping down domestic levels of cheese production and by maintaining strict quotas to control the level of French brie or English Wensleydale hitting local cheese shops. According to Canadian customs law, once the limit on imported cheese has been reached, it is still possible to import, but the buyer will be forced to pay an incredible 245% surcharge. This tax on over-limit cheese stands as one of the most onerous in the entire Canadian tax code, bested only by the 253% tax on above-quota imports of chicken parts.

Not making wine
Canadian taxes, as a rule, are not kind to drinkers. A bottle of French wine is taxed when it hits the Canadian border, taxed again when it is shipped to a provincial warehouse and then taxed a few more times before it makes its way to the local wine bar. But buried within Canada’s 1,500-page tariff schedule is perhaps the only instance of federal authorities giving a tax break to the makers and sellers of intoxicating liquors. As per section 2009.61 of the customs tariff schedule, grape juice entering Canada is subject to a not unsubstantial tariff of 9.5%. If the importer vows to ferment the imported grape nectar into wine, however, the tariff is removed. “Grape juice for wine-making,” say the regulations, enters Canada tariff-free.

Klondike gold (sort of)
More than 100 years after the end of the Klondike Gold Rush, the Yukon is still churning out gold. About 1000 kg of gold per year, in fact, all harvested by a small network of mom and pop placer miners sifting out gold dust from Yukon streams. Despite this, the Yukon government collects comically low amounts of taxes on the dozens of shiny bricks leaving its borders each year. As per the territory’s Placer Mining Act, the Yukon taxes gold with a royalty of “two and one-half per cent of its value.” But here’s the catch: The “value” of an ounce of gold, according to the Act, stands at a mere $15—a rate last updated in 1906. As a result, while miners can earn at least $1,300 for every ounce of gold they pull from Yukon creeks, they will owe the Yukon government a mere 35 cents. It may look like one of Canada’s most glaring tax loopholes, but the Yukon remains staunchly committed to keeping its gold taxes just the way they are. In 2011, when opposition members in the territorial legislature suggested that the Yukon bring its gold royalties out of the Steam Age, premier Darrell Pasloski dismissed the proposal as “anti-mining,” “anti-good jobs,” and “anti-economic development.”

Fools
The 18th century English writer Henry Fielding famously wrote that “a lottery is a taxation upon all the fools in creation.” This sentiment of a “tax on fools” is not good enough for United States tax authorities, however, who insist on taxing lottery winnings as regular income. As a result, in higher-tax jurisdictions such as New York City, the combination of federal, provincial and municipal taxes can eat up as much as 50% of a multi-million dollar jackpot. Canada, in one of its few instances of taxing something lower than the United States, does not tax lottery winnings at all. Since lotteries are used to fund charities and provincial government, “there is already a considerable element of implicit taxation of lottery and gambling proceeds,” according to a 2004 report by the Department of Finance. Basically, Canadians are not taxed on lottery winnings because, in the eyes of federal authorities, the lottery is already a tax. In short, it may be the world’s most explicit government endorsement of the idea of a “tax on fools.”

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